Hawkish US Fed tone hits D-Street; Sensex slips 179 pts; IT stocks shine

A mild recovery post a gap-down start quickly dismantled during the last hour of the session as market participants offloaded metal and rate-sensitive counters

MARKET LIVE: Sensex dips 300 pts, Nifty below 15,700; India VIX up 4%

Stock market updates: A surprisingly hawkish tone by the US Federal Reserve -- where it guided for two potential rate hikes in 2023 -- crushed equities across the globe on Thursday as investors feared global central banks may hike rates sooner than expected.

US Treasury yields gained overnight and dollar strengthened against the rupee to its highest level in six weeks, hammering equity prices on Dalal Street. This comes on the day of weekly F&O expiry, adding to the overall volatility.

A mild recovery post a gap-down start quickly dismantled during the last hour of the session as market participants offloaded metal and rate-sensitive counters.

The frontline S&P BSE Sensex declined 484 points from the day's high and hit a low of 52,040. However, it ended at 52,323 levels, down 179 points or 0.34 per cent. On the NSE, the Nifty50 index breached below its immediate support of 15,650 and hit a low of 15,616. It recovered marginally to end at 15,691 levels, down 76 points or 0.48 per cent.

In the broader markets, the BSE MidCap index cracked 1.3 per cent while the BSE SmallCap index slipped 0.58 per cent.

Sectorally, the Nifty Metal index slipped 2 per cent, followed by the Nifty Realty index (1.6 per cent) and the Nifty PSB and Auto indices (around 1.5 per cent each). The Nifty FMCG and IT indices, on the other hand, gained 0.14 per cent and 0.57 per cent, respectively.

Global markets

Global stock markets were mostly lower Thursday after the Federal Reserve indicated it might ease off economic stimulus earlier than previously thought.

In Asia, the Nikkei 225 in Tokyo lost 0.9 per cent, South Korea's Kospi and Australia's S&P-ASX 200 shed 0.4 per cent each. China's Shanghai Composite Index, on the contrary, rose 0.2 per cent while Hong Kong's Hang Seng added 0.4 per cent.

In Europe, too, the pan-European STOXX 600 index was down 0.3 per cent, the UK's FTSE 100 lost 0.3 per cent, and Frankfurt's DAX was off less than 0.1 per cent. The CAC 40 in Paris also retreated 0.1 per cent.

On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were down 0.3 per cent.

In the commodities market, Gold and Silver futures tanked 2 per cent each while Brent Crude was up over 1 per cent on MCX.

5:47 PM

TECH VIEW :: Sumeet Bagadia, Executive Director, Choice Broking

The index has confirmed the Evening Star candlestick pattern at the top of the trend which suggests correction in the counter. Moreover, the index has given closing below 21 SMA & Middle Bollinger Band formations, which indicates further bearishness for the near term. In addition, a momentum indicator RSI (14) & Stochastic witnessed a negative crossover on the daily time frame. At present, nifty has an immediate support at 15550 levels, whereas 15900 may act as a crucial resistance zone.

5:39 PM

Trade set-up for Friday

An important event ended in the market yesterday, but today the market was neutral at the level of 15550/51700. This confirms that the market trend is strong and may reach 15900/52800 or 16000/53100 level once again. Today, Technology stocks and Reliance gave strong support to the index, which allowed the Nifty to close at 15,700.

The Nifty/Sensex could reach fresh levels on Friday if the indices don't close below the levels of 15550/51700. On an immediate basis, 15770/52500 and 15850/52700 levels would be major hurdles. Below the levels of 15550/51700, the Nifty/Sensex would gradually fall to 15400/51300 or in the worst-case scenario 15300/51000.

Views by: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

5:20 PM

MARKET VIEW :: Markets may return to normalcy but upside momentum is weak

Nifty fell due to the global event, but contained its losses. Even the Asian markets clawed back post weak openings. However advance decline ratio in India remains severely negative for the second consecutive session. Nifty may fall some more to take support around 15567 and then correct upwards. On rises 15750 may be difficult to breach sustainably in the near term.

The fact that the big Fed announcement has passed by without any large damage to global indices means that there may not be a sharp downmove immediately and global markets may go back to their original trend soon; though the momentum on the upside may be weak till a fresh positive trigger emerges on the horizon.

Views by: Deepak Jasani, Head of Retail Research, HDFC Securities

5:02 PM

TECH VIEW :: Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The short term trend of Nifty seems to have reversed down with the short term top reversal at 15901 (15 June). The next downside levels to be watched around 15550 in the next couple of sessions, before showing another round of minor upside bounce. Any upside rally towards 15750-15800 could be a sell on rise opportunity for the coming sessions.

4:50 PM

TECH VIEW :: Levels to watch on Friday

The Nifty index showed a good pull back from 15,600 odd levels which will be immediate support on the downside. Any break below this support can see more pressure. A strong hurdle is formed near 15,750-15,820 zone.

Views by: Rohit Singre, Senior Technical Analyst at LKP Securities

4:40 PM

MARKET OUTLOOK :: Will the correction continue?

Markets extended Wednesday’s fall and lost half a percent, pressurized by weak global cues. The benchmark opened lower and traded volatile in a range till the end. Finally, the Nifty index settled at 15,691 levels. On the sectoral front, mostly traded in tandem with the benchmark and ended in the red however buying in defensive pack viz. IT and FMCG for the second consecutive session capped the downside. The broader markets remained under pressure as both midcap and small cap lost 1.3% and 0.5% respectively.

The US Fed’s hawkish tone didn’t go well with the equity investors across the globe and we might see the overhang for a session or two. Going ahead, the focus would shift back to fundamentals and domestic factors viz. pace of vaccination drive, reopening by states, etc. Meanwhile, we reiterate our advice of keeping a check on naked leveraged positions and let the markets stabilize.

Views by: Ajit Mishra, VP - Research, Religare Broking

4:26 PM

MARKET VIEW :: Is US Fed's commentary really a reason to worry?

Indian equities traded mirroring global peers after the optimistic comments by Fed acknowledging the strengthening of the economy. The rate hike has been advanced by a year to 2023 but is not the key point of issue to the market. While the fast normalization of the economy and strong job market can lead to a taper in bond-buying plan. This can lead to tightening of bonds yields which will impact the pricing of equity asset.

Views by: Vinod Nair, Head of Research at Geojit Financial Services.

4:14 PM

MARKET RECAP :: Gainers and losers in Thursday's trade

Bulls stepped back a bit today following the economic forecast by the US Fed as the Street stayed cautious on the slow economic recovery in emerging markets unlike some of the developed markets. While Metal names saw profit booking, we did witness keen buying interest in Cement & IT well supported by select consumer names during the volatile afternoon session of trade

Views by: S Ranganathan, Head of Research at LKP Securities

4:05 PM